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Development Economics IIA

Development Economics IIA

Question 1 of 47

Which of the following would be an appropriate alternative to this
Development Economics IIa
as a name for this course?

Select one of the following:

Industrialisation and development: Strategies and experience

Development economics: The Neoclassical Approach

Open Economy development economics

Developing countries in the international economy

Development, Accumulation and Structural Change

Question 2 of 47

1

Who wrote the textbook for the course and what kind of economist is he

Select one of the following:

Weaver - Kaleckian

Thirdwood - Keynesian

Thirllwarld - Supply-sider

Thirlwall - Kaldorian

Furball - Neoclassical

Question 3 of 47

1

Using the figures from our lecture (lecture 1), roughly speaking, what is the average percent of the workforce in the low income countries working in each of the following sectors?
Agric. - Indus. - Services

Select one of the following:

5 - 15 - 80

33 - 33 - 34

80 - 15 - 5

75 - 10 - 15

61 - 19 - 21

Question 4 of 47

1

At what level of employment does the diminishing marginal product of labour start?

Select one of the following:

LA

LB

LC

LD

LE

Question 5 of 47

1

Which of the following has NOT been argued in the lectures

Select one of the following:

Agriculture is characterised by diminishing returns to labour

The income elasticity of demand for agricultural output is relatively low

As income rises (and productivity rises) the relative importance of agriculture in purchases will increase

Industry is an increasing returns activity

The income elasticity of demand for industry’s output is relatively high

Question 6 of 47

1

Using our standard growth formula assume we have a population growth of 2% per year and our incremental capital output ratio is 5. What level of savings would be required to give us a constant GDP per capita if the annual GDP was £150 billion. (Assuming all the savings are invested)

Select one of the following:

5%

15%

£15 billion

£150 billion

There is insufficient information

Question 7 of 47

1

Lack of access to basic sanitation and primary health care low income countries contributes to high infant mortality.
On average and approximately, how many deaths are there per 1000 live births?

Select one of the following:

Question 8 of 47

Select one of the following:

A=Low Gini B=High Gini C= High Level of Development D=Low Level of Development

A=High Gini B=Low Gini C= Low Level of Development D=High Level of Development

A=High Growth B=Low Growth C= Low Level of Development D=High Level of Development

None of the above

Question 9 of 47

1

Who defines undernourishment as: “a state in which physical functioning of a person is impaired to the point where she cannot maintain an adequate level of performance at physical work, or at resisting or recovering from the effects of any of a garden variety of diseases”?

Select one of the following:

Kuznets, S (1955) Economic Growth and Income Inequality

Malthus, T (1798) Essay on the Principle of Population

Dasgupta, Partha (1993) An Inquiry into Well-being and Destitution

Galbraith, J.K. (1962) Economic Development in Perspective

Sen, A (1984) Poverty and Famines: An Essay in Entitlement and Deprivation

Question 10 of 47

1

What it is the missing word in the following famous quote?
“The country that is more developed _________ only shows, to the less developed, the image of its own future.”

Select one of the following:

Agriculturally

Culturally

Financially

Industrially

Economically

Question 11 of 47

1

Which of these did NOT explicitly advance a “stage” theory of development?

Select one of the following:

Smith

Clark

Marx

Fisher

Verdoorn

Question 12 of 47

1

Which of the following is not one of Rostow’s stages?

Select one of the following:

Traditional

Take-off

Transitional

Maturity

Pre-maturity

Question 13 of 47

1

Which of Rostow’s stages might be best described as involving a shift to “self sustaining growth”, the emergence of “leading sectors”, an expansion of the market for output, an increase in the supply of capital, a channelling of agriculture’s surplus (via the state or private sector) to industry, the growth of self-finance by businesses, the spread of new production techniques (production functions) and the beginning of a secondary expansion?

Select one of the following:

Traditional

Transitional

Take-off

Pre-maturity

Maturity

Question 14 of 47

1

Which of the following was not one of Kaldor’s growth laws (as described in the lecture)?

The sequential dominance of the Nobility, then Entrepreneurs, then Technocrats

Question 17 of 47

1

Which author or authors’ “stage theory” has the income elasticity of demand and changes in income elasticity of demand as the major driver of shifts between stages?

Select one of the following:

Smith

Rostow

Marx

Fisher and Clark

Kaldor

Question 18 of 47

1

This is the result of a regression estimating “Verdoorn’s Law” in China
pm = -9.46E-05 + 0.71(gm)
(-0.02) (19.10) R^2=0.73
How might we best interpret this result?

Select one of the following:

Productivity increases are causing growth in manufacturing

The R^2 of 0.73 and the coefficient on manufacturing sector growth 0.71 are sufficiently similar to counterbalance the negative coefficient on the intercept

A 1% increase in the growth of the manufacturing sector will cause an increase of 0.71% in that sector’s productivity. But the low R2 and the negative t stat on intercept coefficient render the result meaningless

A 1% increase in the growth of the manufacturing sector will cause an increase of 0.71% in the growth of that sector’s productivity

Productivity and growth are not related to each other as the t-statistic on the growth coefficient (19.10) is too low

Question 19 of 47

1

Which of the following is a “correct” reference for a book by Alice Amsden?

Select one of the following:

Amsden, Alice (1929) Asia’s Next Giant: South Korea and Early Industrialisation

Amsden, Alice (1959) Asia’s Giants: South Korean and Japanese Industrialisation

Amsden, Alice (1979) Asia’s Last Giant: Japan and Late Industrialisation

Amsden, Alice (1989) Asia’s Next Giant: South Korea and Late Industrialisation

Amsden, Alice (1999) Asia’s Next Giant: North Korea and Early Industrialisation

Question 20 of 47

1

Suppose a country’s population is growing at 3% per year and the ICOR is 4. Using the “standard” formula what savings rate would be needed to ensure a constant level of GDP/capita?

Select one of the following:

12%

4%

3%

0.75

There is insufficient information

Question 21 of 47

1

Which of the following is least likely to be assumed by traditional development economists?

Select one of the following:

As income and productivity rise the relative importance of agriculture in purchases will increase

Agriculture is characterised by diminishing returns to labour

The income elasticity of demand for agricultural output is relatively low

Industry is an increasing returns activity

The income elasticity of demand for industry’s output is relatively high

Question 22 of 47

Select one of the following:

A=High Growth B=Low Growth C= Low Level of Development D=High Level of Development

A=High Gini B=Low Gini C= Low Level of Development D=High Level of Development

A=Low Gini B=High Gini C= High Level of Development D=Low Level of Development

None of the above

Question 23 of 47

1

Which of these is NOT a Classical Economist and/or did NOT write the Book on the date implied

Select one of the following:

Karl Marx (1867) Capital: A Critique of Political Economy

David Ricardo (1817) Principles of Political Economy and Taxation

Adam Smith (1776) An Inquiry into the Nature and Causes of the Wealth of Nations

Thomas Malthus (1798) Essay on the Principle of Population

W. W. Rostow (1805) The Stages of Economic Growth

Question 24 of 47

1

In the lecture (L4) it was argued that Smith found sources of increasing returns in specialisation. Which of these is NOT relevant to this argument?

Select one of the following:

The encouragement of invention of “machines which facilitate and abridge labour, and enable one man to do the work of many”

The Pin Factory example

Learning by doing increasing the “dexterity of every particular workman”

The saving of time “passing from one species of work to another”

Smith’s arguments with Malthus about the role of trade

Question 25 of 47

1

Malthus raised doubts about which law when raising the prospect of what might now be termed “demand deficient unemployment”?

Select one of the following:

Ricardo’s Law

Smith’s Law

Marx’s Law

Verdoorn’s Law

Say’s Law

Question 26 of 47

1

Which of the following is NOT true about Ricardo?

Select one of the following:

He was an industrialist, politician and economist

He argued that UK should specialise in agricultural produce, including corn and beef, because of its absolute advantage in producing these

He campaigned for repeal the “Corn Laws” in England which had been protecting UK agriculture

He predicted that capitalist economies would end up in stationary state with no accumulation and therefore no growth

He argued that diminishing returns in agriculture would lead to higher food prices

Question 27 of 47

1

Where
variable capital = v
constant capital =c
profits = s
A Marxist economist would NOT normally use which of the following definitions

Select one of the following:

Total output=v+c+s

Degree of exploitation = s/v

Organic composition of capital = c/v

The rate of profit = (s/v)/(1+[c/v])

Growth = s/c

Question 28 of 47

1

Thirlwall Ch5 Theories of Economic Growth argues:
"An attempt is made to illustrate the contemporary relevance of the theories discussed. … the wheel has turned full circle, and … the most recent theories of endogenous growth rehabilitate many of the ideas of the old classical economists particularly _________ __________ emphasis on increasing returns associated with investment in manufacturing industry, and the general emphasis in both classical and __________ theory on the role of capital accumulation, and the embodiment of various forms of technical progress associated with it.”
What are the missing words?

Select one of the following:

Thomas Malthus’s AND Ricardian

David Ricardo’s AND Neoclassical

Adam Smith’s AND Keynesian

Karl Marx’s AND Neo-Keynesian

Joseph Schumpeter’s AND evolutionary

Question 29 of 47

1

Which of these is NOT a Classical Economist and/or did NOT write the Book on the date implied

Select one of the following:

Karl Marx (1867) Capital: A Critique of Political Economy

Nicholas Kaldor (1805) The Stages of Economic Growth

David Ricardo (1817) Principles of Political Economy and Taxation

Adam Smith (1776) An Inquiry into the Nature and Causes of the Wealth of Nations

Thomas Malthus (1798) Essay on the Principle of Population

Question 30 of 47

1

Suppose a country’s population is growing at 3% per year and the ICOR is 4. Using the “standard” formula what savings rate would be needed to ensure a constant level of GDP/capita?

Select one of the following:

24%

12%

4%

0.75

There is insufficient information

Question 31 of 47

1

In the lecture on the Classical Economists it was argued that Smith found sources of increasing returns in specialisation. Which of these is NOT relevant to this argument?

Select one of the following:

The encouragement of invention of “machines which facilitate and abridge labour, and enable one man to do the work of many”

Smith’s discussions with Marx about the role of exploitation

The Pin Factory example

Learning by doing increasing the “dexterity of every particular workman”

The saving of time “passing from one species of work to another”

Question 32 of 47

1

Malthus raised doubts about which law when raising the prospect of what might now be termed “demand deficient unemployment”?

Select one of the following:

Ricardo’s Law

Say’s Law

Smith’s Law

Marx’s Law

Verdoorn’s Law

Question 33 of 47

1

Which of the following is not one of Harrod’s questions?

Select one of the following:

What must be the DY/Y for Ip to equal Sp (i.e. for a “dynamic equilibrium”?)

Will a dynamic equilibrium between Ip and Sp tend to prevail?

Is any dynamic equilibrium between Ip and Sp stable?

Will the growth rate be such that labour and capital will tend to be fully employed?

What is the optimal level of growth to ensure the maximisation of the sum individuals in the society’s welfare?

Question 34 of 47

1

Assuming there is a problem with the warranted growth rate being less than the natural growth rate. Which of the following was NOT suggested as a possible solution?

Select one of the following:

reduce the population growth rate

raise the savings rate using fiscal policy

raise the savings rate using monetary policy

reduce the amount of capital needed per unit of output

encourage more of the population to work

Question 35 of 47

1

Joan Robinson used which phrase to describe the situation where ga=gw=gn

Select one of the following:

The perfect equilibrium

The growth “norm”

A “golden age”

The desired optimum

A “happy medium”

Question 36 of 47

1

Who in 1946 published an article in Econometrica outlining a model very similar in insights to Roy Harrod’s 1939 model?

Select one of the following:

E. Dorar

E. Domar

E. Domer

E. Dormer

E. Dobar

Question 37 of 47

1

This is a Cobb-Douglas Production function in “extensive” form
Y = bK^(a)*L^(1-a)
Which of the following is not true?

Select one of the following:

Y is output

b is some measure of technology

a = elasticity of output with respect to the capital stock

1-a = elasticity of output with respect to the labour force

a+ (1-a) = 1 =>increasing returns to scale

Question 38 of 47

1

If you were writing an essay on the major features of "stages of growth" theories who would you be least likely to mention as one of the stage theorists?

Select one of the following:

Kaldor

Rostow

Fisher and Clark

Marx

Smith

Question 39 of 47

1

In a standard Cobb-Douglas Production function (Y=TKaLb) which of the following is NOT true?

Select one of the following:

a+b=1 implies constant returns to scale

a+b<1 implies decreasing returns to scale

a+b>1 implies increasing returns to scale

0<a<1 and 0<b<1 reflects diminishing returns to the factors

a and b are often assigned the values 0.6 and 0.8 to reflect their respective shares in national income

Question 40 of 47

1

Taking logs of a standard Cobb-Douglas Production function (Y=TKaLb) differentiating with respect to time and using a discrete approximation we get the following functional form:
rY=rT+a rK+b rL
When using this to model an economy which of the following would NOT be a good description of rT ?

Select one of the following:

The annual rate of growth of “total productivity”

That part of growth of output not attributable to increases in factors of production

A “coefficient of ignorance”

“Advances in knowledge”

An accurate measure of the economies degree of technical progress

Question 41 of 47

1

Thirlwall discusses the possible contributions of the agricultural sector to the process of development under four headings. Which is not one of them?

Select one of the following:

Product contribution

Factor contribution

Market contribution

Foreign exchange contribution

Environmental contribution

Question 42 of 47

1

Who was the father of the 1960s Green Revolution and was awarded the Nobel Peace Prize in 1970 in recognition of his contributions to world peace through increasing food supply

Select one of the following:

W. A. Lewis

Norman Borlaug

Nicholas Kaldor

Tony Thirlwall

Thomas Malthus

Question 43 of 47

1

Complete the following quote from Lewis. “The central problem in the theory of economic development is to understand the process by which a community which was previously

Select one of the following:

saving and investing 4 or 5 per cent of its national income or less, converts itself into an economy where voluntary saving is running at about 12 to 15 per cent. of national income or more.”

corrupt, converts itself into a democracy.”

industrialised, converts itself into a post industrial society.”

saving 15-20 per cent of its national income, converts itself into an economy where voluntary saving is running at about 50 per cent. of national income or more.”

investing nothing, converts itself into an economy where voluntary saving is running at about 10 per cent. of national income.”

Question 44 of 47

1

What is Lewis’s answer to the question "why do [poor countries] save so little”? Because

Select one of the following:

they are poor

their government are too corrupt

their taxes are too high

their capitalist sector is small

they lack a sufficiently developed financial sector

Question 45 of 47

1

In Lewis’s model earnings in the subsistence sector set a floor to wages in the capitalist sector but in practice wages in the capitalist sector have to be higher than this. That is, there is a “gap”. Which is the figure closest to Lewis’s estimate of the typical size of this gap?

Select one of the following:

10 %

15 %

20 %

30 %

50%

Question 46 of 47

1

Which of these is not one of Lewis’s description or explanation of the gap?

Select one of the following:

The gap is nominal not real in that it merely reflects the higher cost of living in capitalist sector

Reflecting a psychological cost. The cost of moving from an easy going way of life in the subsistence sector to the more regimented and urbanised environment of the capitalist sector

Reflecting unskilled workers being of more use to the capitalist sector after they have been there for some time than is the raw recruit from the country

Because of the need for urban workers to send money home to the countryside

Reflecting a difference in conventional standards as a result of acquiring tastes and a social prestige which conventionally are recognised by higher real wages

Question 47 of 47

1

According to Google Scholar how many times, approximately, has
Lewis, W.A. (1954) Economic development with unlimited supplies of labour. The Manchester School, 22(2), 139-191.
been cited?